Michael S. Greco
President-Elect, American Bar Association
Real Estate Bar Association Annual Meeting
Westborough, Massachusetts
November 15, 2004
Thank you very much for inviting me to join you, and for giving me the
opportunity to share a few thoughts.
I visited with you back in April in Boston, but that was before Boston became
home of the World Champion Red Sox. It is even more pleasant to be with you now.
In April I talked about the unauthorized practice of law, and the legal profession’s
challenge to provide a universal and accepted definition of the practice of law that will
serve to protect the public in this age of easy access to information, mis-information,
and services.
Today I want to address another controversial and troublesome issue facing our
profession: the threat to the attorney-client relationship.
Recent regulatory policies and activities of federal governmental agencies are
threatening to destroy attorney-client privilege.
One example is the proposed amendments to federal sentencing guidelines for
corporations, association, unions and other types of entities. One such amendment
would authorize the government to urge organizations to waive the attorney-client
privilege and work-product protections. Such a waiver would be urged so that the entity
could thereby demonstrate its “thorough” cooperation with the government, qualifying
for a reduction in the culpability score under the sentencing guidelines.
Another policy – one that directly affects the real estate industry -- comes from
the USA Patriot Act. The federal government has proposed rules to combat alleged
money laundering and terrorist financing in real estate transactions, transactions that
are normally governed by state and local law.
The ABA Section of Real Property, Probate and Trust Law is concerned that the
imposition of the Bank Secrecy Act’s anti-money laundering program requirements on
lawyers would adversely affect the attorney-client relationship, particularly the duties of
confidentiality.
As we in this room know full well, a client trust’s in the confidence of his or her
communications with their lawyer is necessary for the effective representation of the
client, including advising the client, if necessary, to refrain from wrongful conduct.
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Unless and until evidence of attorney criminal conduct is produced, the
presumption should be that the sanctity of communications between client and lawyer
must be preserved.
Several bar-related organizations around the country (including the Florida State
Bar’s Real Property Section) have taken the position that anti-money laundering
regulations should not be imposed on real estate attorneys, because such imposition
may force these attorneys to breach important ethical obligations in order to comply with
federal real estate regulations. As we all know, this would have a chilling effect on the
lawyers’ role in assisting client compliance with the law.
Another example includes lawyers who provide advice and assistance
concerning tax shelters. What the IRS had begun, Congress completed with the recent
enactment of the JOBS Act. Now, when a lawyer provides counsel to a client
concerning certain designated tax shelters -- even if the lawyer did not assist in the
creation of such a shelter -- he or she must disclose to the government the name of the
client and, more troubling, the nature and substance of the consultation.
While the ABA agrees with the overall objective of cracking down on the
unscrupulous few who would undermine the integrity of the profession by
exploiting attorney-client protection, a lawyer should not be held criminally liable, nor
threatened with criminal liability, nor intimidated in any way, if he or she has violated no
criminal law, and has only rendered independent legal advice.
The ABA has been working with the SEC to ensure that the lawyer ethics rules
mandated by the Sarbanes-Oxley Act of 2002 do not harm the confidential attorneyclient relationship. Section 307 of the Act instructed the SEC to adopt a new federal
rule requiring all lawyers appearing and practicing before the agency to report
misconduct “up the ladder” to the company’s senior management, and if necessary, to
its board of directors.
Although the ABA generally supported the SEC’s “up the ladder” reporting rule—
both in its written comments to the Commission and by formally changing its own Model
Rule 1.13 to mirror the agency’s new rule—the ABA strongly opposes the SEC’s socalled “noisy withdrawal” rules.
Under these proposed rules, if the corporate client fails to take appropriate remedial
steps after being informed by the lawyer of illegal activity, the lawyer would be required
to withdraw from representation and disaffirm any tainted documents and the lawyer—
or the company—would be required to notify the SEC of the withdrawal.
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In the ABA’s view, the noisy withdrawal proposals, though well-intentioned, would
destroy companies’ trust and confidence in their lawyers, and would encourage
companies to avoid consulting their lawyers on close issues or withhold necessary facts
when they do consult lawyers.
Fortunately, the SEC is taking a second look at its “noisy withdrawal” rules.
Another example is what the FTC did two years ago in issuing regulations
following passage of the Gramm-Bleach-Bliley Act, by mystifyingly including lawyers in
the Act’s definition of “financial institutions”, and requiring lawyers to provide information
confusing to clients, and inconsistent with the attorney-client privilege.
The ABA sued the FTC when it refused to respond to our request to correct the
regulations, and the federal trial court enjoined the FTC. We have word that the FTC
will file an appeal in early December. The ABA is prepared to continue to fight this
issue in the appeals courts and in Congress.
These proposed rules and similar others – either inadvertently or intentionally -would severely weaken the attorney-client confidential relationship between companies
and individuals and their lawyers. They would harm not only the clients, but also the
investing public and society.
In response to these threats, the ABA has formed the Task Force on the
Attorney-Client Privilege (on which Boston attorney Stan Keller of Palmer & Dodge is
serving).
The Task Force’s mandate is to examine
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the purposes behind the privilege and its exceptions;
•
the circumstances in which competing objectives are currently being
asserted by governmental agencies and others to override the privilege;
and
•
the extent to which the correct balance is being struck between these
competing objectives and the important policies underlying the privilege.
The protection of communications between client and lawyer is a bedrock
principle of the American justice system. It is vitally important that federal regulators
and policymakers strike the right balance between compliance with the law and
protection of the public. And it is our task – mine and yours – and one that the ABA
Task Force has undertaken - - to help those regulators and policymakers get it right.
It is not merely a matter of good business, but of serving the public interests.
Even more important, it is about protecting the independence of the legal profession.
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I believe firmly that any effort to undermine the lawyer’s role in society, to
marginalize or diminish the lawyer’s role, to interfere with the traditional confidential
relationship between lawyer and client, will harm not only the profession, but the people,
and in the end, our democratic form of government.
Why do I say this?
Historically, it has been the lawyers who helped to found this republic, who
drafted the sacred documents – the Declaration of Independence, the Constitution, and
the Bill of Rights – and who for 225 years have been protecting the rights guaranteed
every citizen in America by those documents. The people look to their lawyers to
protect their rights, and we cannot fail them
Attacks on lawyers are attacks on the profession whose main purpose is to
protect those guaranteed rights, and to protect the people from the excesses of their
government, including the federal agencies that are now targeting the attorney-client
privilege.
William Shakespeare hit it on the nail when he said that the way to create chaos
in society is to begin by killing all the lawyers.
Today the effort is death of lawyers by more subtle means: it is the role of the
lawyer, the standing of the lawyer -- the lawyer as protector of fundamental rights -- the
lawyer as trusted problem solver -- the lawyer as respected citizen-statesman in society
-- that some are trying to kill. And we must not let it happen.
The American Bar Association is committed to the fair administration of justice.
Our motto, “Defending liberty, Pursuing justice,” says it all. We believe that lawyers are
called on to make that motto a truth, and that is our goal every day, in every community
in this great country. We work to establish fairness and justice, particularly when
disputes or problems rise to the level of entering the justice system. Lawyers have the
ability to right wrongs, and to ensure that equitable treatment within the law is our guide.
It is part of our professional code of conduct: civility, independence, learning and
public service. Increasingly in recent years the legal profession has been under
unrelenting attack. Interest groups yearly spend millions of dollars on shameless and
unfair advertising campaigns attacking not only lawyers, but also judges and our justice
system.
Such negative attacks distort what lawyers do, and wrongly blame lawyers in
order to cover mistakes or misconduct by others in society, including that of some
unethical and unlawful members of the business community.
As lawyers, we take our share of hits -- the lawyer jokes, and the negative
criticism that lawyers and lawsuits drive up costs. While misguided and inaccurate,
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those charges are particularly popular in election years, as they have been in this one.
Attacking lawyers has become a popular sport, particularly among those in society who
are uninformed, misinformed, ignorant, or just plain mean-spirited.
But it is a sport, Shakespeare reminded us, that is dangerous to the continued
health and stability of our society. It is a sport being played to a large degree by those
who stand to profit the most by a crippled or ineffective legal profession.
To be sure, disdain for our profession has existed for a long time. A Yale
commencement speaker, Timothy Dwight, once warned against the evils to be found in
the legal practice. He accused our profession of meanness and deception, of needless
litigation, of postponing trials to glean the last coin from a client’s pocket, and he urged
the graduates to shun a career as a lawyer like “death or infamy”.
Interestingly, Mr. Dwight delivered his remarks in July of 1776, a time when most
of the signers of the Declaration of Independence and drafters of the Constitution were
lawyers – men so high in stature and quality that Thomas Jefferson referred to them as
“demi-gods”.
While concern about the decline of respect for the legal profession in the minds
of some may be interesting, the more important issue is the impact on the public’s trust
and confidence in our system of justice, and on the public’s understanding of the critical
role of lawyers in ensuring the Rule of Law.
While lawyers may not win a popularity contest, lawyers, despite the criticism,
have always enjoyed a special status – and indeed a special place – in the hearts and
minds of Americans.
I believe this is so because, notwithstanding the criticism, deep down the public
knows that the legal profession has a mission that is bigger than the business of
practicing law. The people understand the concept of the lawyer as protector of rights
and problem-solver, and the concept of the “lawyer-statesman”, which combines
practical wisdom and statesmanship to advance not only a client's interests but also
those of society.
Simply stated, lawyers protect and serve the public. And the people know that.
But because lawyers are always in the news, because lawyers are at the center of
commercial and social activity, and involved in highly controversial trials and issues –
civil, criminal and transactional, we are easy targets for criticism.
Let me be clear: I am not advocating that a lawyer – no more than any other
professional – no more than the President of the United States – is above the law.
Lawyers -- like everyone else -- must be punished or disciplined for proven violations of
criminal laws or ethical standards.
What I firmly do advocate is that lawyers not be held criminally or ethically liable
for giving independent legal advice to a client, and not be held liable for a client’s
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criminal conduct if the lawyer did nothing more than that which lawyers have done since
the founding of our republic: giving legal advice after confidentially learning all the facts
from a client, which the attorney-client privilege ensures that the lawyer will learn from
that client.
It is the attorney-client privilege that enables the lawyer to serve best his or her
client, by learning the worst from the client, which the client willingly communicates
because of the protection of confidentiality. When the lawyer serves the client thusly,
so are the public interest and society served.
I conclude these remarks by reminding the lawyers of America, and the people
whom we serve, that the attorney-client privilege is fundamental to our system of justice
and to our democracy, and that we must all vigorously protect it.
I don’t need to tell you that lawyers have never been more important to society
than now, because you know it as well as I do. Your important work with the Real
Estate Bar Association complements well our work at the ABA. I urge you to join us in
our common missions, particularly in helping to protect the attorney-client privilege --- a
privilege that belongs to, and protects, the people.
Thank you for your kind attention.
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